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2007 (4) TMI 205 - HC - Income TaxEntitlement for exemption u/s 10(10C) as well as relief u/s 89(1) - Ex gratia payment received on voluntary retirement - HELD THAT:- The only dispute is regarding the availability of the relief under section 89 of the Act in respect of the amounts in excess of Rs. 5,00,000 received by the assessee on voluntary retirement. On a plain reading of the second proviso to section 10(10C) of the Act, it is clear that the restriction therein is only with reference to the grant of exemption u/s 10(10C) and the said proviso does not bar relief if available u/s 89 of the Act. In the present case, on the assessee opting for voluntary retirement, his services were terminated and the amount has been paid as per the voluntary retirement scheme at the time of terminating the service of the assessee. Therefore, the amount received by the assessee being "profits in lieu of salary" as contemplated u/s 17(3) of the Act, the assessee would be entitled to the relief u/s 89 of the Act. It is pertinent to note that the definition of the words "profits in lieu of salary" in section 17(3) of the Act, is an inclusive definition and as per section 17(3)(ii), any payment received by the assessee from an employer except the payments referred to in clauses (10), (l0A), (l0B), (11), (12), (13) or (13A) of section 10 would be "profits in lieu of salary". Since the payment received under the voluntary retirement covered u/s 10(10C) of the Act does not find place in the excluded category specified in section 17(3) (ii), it is evident that the amount received on voluntary retirement would be "profits in lieu of salary" as contemplated u/s 17(3) of the Act and consequently entitled to relief u/s 89 of the Act. Thus, the decision of the Tribunal in holding that the assessee is entitled to the exemption u/s 10(10C) of the Act and also rebate u/s 89 of the Act in respect of the amount received in excess of Rs. 5,00,000 on account of voluntary retirement, cannot be faulted. In the result, the question of law set out hereinabove is answered in the affirmative, that is, in favour of the assessee and against the Revenue.
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